4. Except for Argentina, the major countries that produce exportable surpluses of wheat have increased production greatly since World War II by using new and superior agricultural inputs, and they have thereby reduced the real cost of production. Argentina continues to be at a marked disadvantage in this competition because it has not been profitable for Argentine farmers to increase yields. Success in obtaining substantially higher yields depends in large measure upon favorable technical and economic conditions for the utilization of fertilizer, mainly nitrogen.
5. In the major countries that now produce exportable surpluses, such as Canada, Australia, and the United States, additional mechanization is contributing more toward saving labor than toward increasing yields per acre. More important than additional mechanization is the availability and use of fertilizer-responsive grains along with cheap fertilizer and pesticides, as well as the technical possibilities of increasing yields at a profit when fertilizer and pesticides are used.
Until recently, monsoon rice production—the core of the food economy in the monsoon area—has barely managed to stay abreast of the increases in population, except for Japan and Taiwan. World wheat production, however, increased much more than rice. The explanation of the upsurge in wheat production since World War II is fundamentally of two parts: (1) favorable producer wheat prices and (b) improvements in production possibilities from modernization. In western Europe the decline in the price of fertilizer and the high protected price of wheat account for most of it. In Canada and Australia, where mainly dryland wheat is grown, the large gains in production have been due less to modernization via cheap fertilizer than to other improvements and generally profitable wheat prices. (Fertilizer is generally un-suited to dryland wheat.)
In the United States the federal program designed to check the acreage devoted to wheat could not wholly counteract the incentive value of government checks added to the price of wheat. Cheap fertilizer applied where it is not too dry, mechanization, and other new production advances have increased production despite the reductions in wheat acreage. As stated earlier, production in Argentina lagged for want of price incentives and fertilizer. Until very recently in India-Pakistan the producer incentives were also unfavorable; fertilizer was scarce and dear relative to the price of wheat; so there was no inducement to bring in or to develop wheat varieties that would be fertilizer-responsive. Wheat production in the U.S.S.R.—despite the changes in the pattern of producer incentives and the thrust of mechanization--has probably become more rather than less dependent upon weather (59). New and remarkable today arc the recent wheat crops of India-Pakistan weII over 20 million metric tons.
What are the wheat and rice signals telling us about production and utili/.a-tion? My interpretation of these signals is as follows: